Tag Archives: payment chargeback

When you are an online seller, you are going to get stiffed now and again by a small percentage of your buyers – that’s a given. A small margin needs to be built into your prices to self-indemnify against this.

If you are an eBay seller, and/or a Paypal user, then you are guaranteed to get stiffed more often as their rules are stacked entirely against the seller. And buyers know that, hence those mediums attract many dishonest buyers.

With Paypal users, all they need to do is claim the item didn’t arrive – and they get free money as Paypal will refund them from your account. Simple as that. The seller will always be in the wrong.

You will have sent the item and Paypal will gleefully refund the buyer as well. Nice huh? Yes, it is unfair and maybe corrupt, but that’s the price of using Paypal.

This is called item not received fraud. Yes, its fraud. But, its hard to prove. So many of them get away with it time and time again.

If you are a seller that uses eBay and/or Paypal, unless you send the item tracked, the buyer can claim non-receipt. If you are selling low value items you have good markup on, you may choose to take the risk.

If the seller uses a credit or debit card (with the exception of transactions processed by Nochex that doesn’t allow chargebacks), they can also claim non receipt of goods and chargeback the payment without difficulty.

Certainly, in the USA, chargeback is often used instead of customer service it seems. Many Americans are too lazy to contact you in the event of a genuine problem, they just call their bank and do a chargeback.

If an item you sold, erm…. doesn’t arrive, you may take the view that sending another doesn’t cost you much (assuming that is the case). Most of the time, this will be item not received fraud, and the buyer simply wants two for the price of one.

You may alternatively choose to wash your hands of the buyer and choose to refund them for a quiet life. This way they simply get a free item. Either way, the buyer wins.

So here’s the thing: How many people are there out there enjoying free stuff and/or free refunds for their online shopping this way? And more to the point, what can honest online sellers do about it apart from document them somewhere for others to find?

We know that the amount of items delivered incorrectly and/or lost by the Post Office is minuscule compared to the volumes they handle. In the real world, as a volume online seller, you might expect two or three genuine item not received claims a year. If that.

Some small firms and online sellers get three a week! Gee, there are some unlucky people out there for whom Royal Mail doesn’t appear to work properly, eh?

Our websites take debit/credit cards and Paypal. Don’t you think it odd that almost ALL the item not received stuff we get is from Paypal users? People who know if you don’t cave in, they will get a refund anyway?

What NOT to do with Paypal Transactions:

Never allow an item to be collected. You cant prove delivery so they get free money – kerching!
Never send anything you cant afford to give away untracked. If they claim the item is not received, they get free money – kerching!
Never send to any address that isn’t the one documented on the Paypal transaction. If you do, they get free money – kerching! If they want delivery to another address, refund it and ask them to order/pay again using the correct address.
Never write on an item something like “If out, leave at number 29”. Ignore any requests to do so.
Never not send an item tracked because of buyer excuses about being at work and nobody to sign, etc. That is their problem – not yours.

Risk Profiling:

What we do now is send items tracked or not according to an informal risk profile we have developed.

If we think there may be risk attached to the transaction, and it is over a certain value, it goes by some kind of tracked service.

In reality, this means addresses in known shit holes like Salford, some parts of Newcastle, Manchester and London, and anywhere else most people wouldn’t want to live, is more likely to get sent Recorded Delivery or similar. Simply because we get a lot of item not received fraud from poor areas. Which stands to reason I suppose.

The name and type of address we also look at.

Mr N Nbokumogo, 15 Nelson Mandella Towers, Craptown, East London will have his order sent Recorded Delivery.

Mable Higginthorpe, Butterscotch Cottage, Twee Village, The Cotswolds, will have her order sent by normal mail.

This isn’t foolproof, as the squeezed middle class are now getting in on item not received fraud. Certainly the Quidco, Wowcher and Moneysavingexpert.com brigade. They like something for nothing.

Risk Profiling on International Sales:

It goes without saying that you will be wasting your time selling to the third world – so forget Africa, India, most of South America and such places. Set up your shopping cart to exclude buyers from these locations.

Americans love to charge back, especially on foreigners, and usually before the item will have arrived from an international location anyway. Tracking is standard and cheap to do within the States. They understand no other method. So when they ask for a tracking number, and you haven’t got one, many chargeback fearing scam. Send to the US tracked if you cant afford to give it away.

Ireland (that is southern, not Northern) we seem to get more than our fair share of item not received fraud from. We set up our shopping cart to charge them higher shipping rates now to cover us to send everything there tracked.

Spain we also seem to get a few item not received claims from. Again, send stuff tracked there unless you can afford to give it away.

Heading Off Potential Item Not Received Fraud:

When we get one of these, we ask them to contact their local sorting office in case “a card wasn’t left”. We know they usually are, but it gives them a face-saving get out for the next bit.

We also ask for the location of their local sorting office so we can contact them directly, and perhaps ask them to start an investigation for theft in transit.

At the same time, we ask that they check with neighbours, look in bins, porches, sheds, etc. in case it was left there.

In over 50% of cases, that’s the last we hear of them!

Of course, they don’t want an investigation at their local sorting office in case the postie remembers the big brown box from last week, or someone there says “What again?” down there. These are serial item not received fraudsters who don’t want attention. They will back off from a seller who doesn’t immediately cave in and wants to investigate instead of refund without questions.

The Hard Nosed Ones:

From time to time, despite proof of delivery being available, some claim that they didn’t sign for it (the signature will always be an unintelligible squiggle or the name wont be the same). Others will claim an empty box was received. These are the ones who are narked you sent something tracked unexpectedly.

Invariably, these addresses will be flats or council estates. Often in areas with high immigration. We fight those claims and usually win.

So What to Do?

We routinely Google email addresses, names and addresses of people who claim items haven’t arrived in case they have been named and shamed somewhere. Occasionally they have, and a simple link to that content makes them go away duly rumbled. However, most of that type of content out there is about eBay, not private websites. So lets put that right.

If you have been shafted by someone on eBay, we have a name and shame article for that here: Name and Shame Bad eBayers where you can document the reprobate. There is more information and articles for eBayers also in this section: eBay information. Only document someone below if it is an item not received claim.
However, if you have suffered an item not received claim, or other spurious claim when selling online via any medium (especially your own site), these are the ones that we need to document for the benefit of each other.

If you get a claim and Google brings you here to read your buyer did it to someone else, that is highly unlikely to be a genuine claim. Rather, that is evidence you have encountered a serial fraudster you can then report to eBay, the bank or Paypal.

It is important to note that if we begin to list such people in the comments section below here, not all of them will be scammers and fraudsters. Some will be innocent people whose item genuinely didn’t arrive. For them, it should be no more onerous than being in a telephone directory. We accept that they may simply be the victim of bad luck.

However, if we build up a list below, and Google brings you here for an item not received claim being made against you, and that name and address is here – publish it again!

This can build to be an excellent list of exactly who these people are who don’t receive stuff so often.

Use the comment box below. You want name, address, email address, eBay name (if applicable) and brief outline of the circumstances.
About time online sellers fought back. Continue reading →